Gold Alliance program looking to expand U.S. exports

Cecil Yancy | Jan 08, 2003

Through an innovative program called the Cotton Gold Alliance, the Cotton Council International (CCI) is looking to increase cotton consumption in foreign countries, but not from the use of U.S. cotton. The “outside of the box thinking” involves encouraging India to use cotton from India. CCI believes the strategy could pave the way for increased U.S. cotton exports.

The idea, says Drayton Mayers, a director of CCI, is “if you take a lake and fill it full of water, all boats will rise.” Polyester is the common No. 1 enemy of cotton, both domestically or internationally. The program is an alliance between CCI and Cotton Incorporated.

At the 2003 Beltwide Cotton Conferences in Nashville, Tenn., CCI president Bill Dunavant III outlined the successes and challenges for 2003.

The Gold Alliance began as a way “to divert foreign cotton into their (foreign) domestic markets,” Mayers says. The more foreign cotton used domestically by foreign countries means more of an opportunity for U.S. exports. The pilot project’s goal: Make inroads into polyester’s foothold outside of North America.

“We’ve had tremendous reaction,” Mayers said at the annual CCI press briefing at the Beltwide Cotton Conferences. The pilot program was launched in October 2003 at an international textile conference.

USDA, the National Cotton Council, and other cotton organizations have pitched in more than $16 million for the three-year project. Cotton Incorporated is the largest private investor, Mayers says. Indian companies are also using local funding.

Ten Indian companies are using the Cotton Seal through license. “The response has been very positive. Globally and in the U.S. retail sales are sluggish, even though retail consumption is at an all-time high. So, additional growth in cotton will have to come by way of exports.

Export markets, which make up half of the U.S. market, have become very important in recent years.

As part of its mission, CCI manages venues and positions itself to be in the right place at the right time to introduce the right buyers to the sellers. In 2003, CCI hosted an executive delegation to Bangladesh, Indonesia and Hong Kong, giving leaders in various segments of the industry a chance to meet the “20 percent who do 80 percent of the business. Those countries buy upwards of 3 million bales of cotton per year.

The international arm of the National Cotton Council also held its 32nd orientation tour, hosting cotton industry people from Estonia, India, Turkey and Bangladesh. The tour starts in Raleigh, N.C. and ends in California.

At the summit in Scottsdale, Ariz., the group hosted representatives from 32 countries. During the three-day summit, more than 140,000 bales of cotton were sold. U.S. exporters made contacts they believe will lead to more than $370 million in cotton sales in the coming year.

Despite the strength of the dollar, which has led to the decimation of the U.S. textile industry, trade agreements in the Caribbean and sub-Sahara have helped exports, Mayers says.

A CCI-sponsored textile summit in Miami generated some $34 million in sales for importers and manufacturers, Mayers says. In 2004, CCI plans to conduct a fiber summit and repeat its textile summit. “These events are selling platforms.”

On the demand-pull side of its strategy, CCI uses the Cotton USA symbol to steer overseas consumers to the best cotton products available. Promotions in Asia, Latin America and Europe have generated more than $180 million in sales.

“Retailers in these areas understand and respect that we are their promotion partner,” Mayers says. “When they see results that are positive, they place larger orders with manufacturers; fabric manufacturers buy more yarn” and so on down the line.

“As we advertise, we are animating the market to give consumer what they want, and, as everyone knows, the consumer is always right,” Mayers says. “We want U.S. cotton to be the preferred fiber.”